Did you ever genuinely think at such a young age, "I could be a billionaire one day"?
The idea of not being able to do that didn't even cross my mind. It was just a question of time.
Right. When you decided to drop out of college, your parents, they cut you off on everything.
And they were just like, "How could you be so stupid to drop out? You only had one semester left."
What's your most unhealthy habit?
First of all, taste in women. I eat very, very poorly. I love McDonald's.
And what is it like dating when you're a billionaire?
People are willing to lie about their net worth.
If you're starting a company today, what can you do to increase your chances of being right place, right time?
Look at any sector that hasn't been affected by AI yet, which pretty much every sector is like a free-to-grab right now.
Scale ended up being valued at $30 billion and had 50% acquisition by Meta. Just last year, you ended up leaving Scale after two years. What happened?
I would say like there were a lot of just arguments with my co-founder.
You want to elaborate on that or should we move on?
Hello everyone. Today we're joined by the one and only Lucy Guo.
Lucy, thank you so much for coming on today.
For those of you who are not familiar with Lucy yet, Lucy is one of the youngest female self-made billionaires in the world. And I looked it up: there's only like 30-something people who became a billionaire as young as you.
Overall, an up-and-coming DJ.
Up-and-coming DJ. Sorry, sorry. Incoming, never mind. I'm kidding. I'm side-questing as a DJ, everyone. It's going pretty well, though.
Yeah, I know. Lucy has more side quests than anyone I know. She is actually able to do all of it. Obviously her main thing is she's been a serial entrepreneur and an investor, but you're also a DJ now, and you actually run almost Olympic times running, right?
I have Olympic qualifying times on the treadmill, although they have been getting harder, so I no longer know if it's Olympic qualifying. But yes, I can run very fast on a treadmill.
And Lucy, I know you've been doing quite a few podcasts lately, and it's been so cool to hear your story on all of them. It's crazy. You've been entrepreneurial for basically your entire life. You were selling Pokémon cards, trading Neopet bots. In college, you were winning hackathons. Do you feel like being an entrepreneur is innate? It's something you have or you don't? Cuz when I look at you, it's like obviously you were destined to be an entrepreneur.
I do think that a lot of it has to do with risk tolerance, right? And you can learn risk tolerance based off your environment that you grew up in. I think that, all things aside, like how my parents raised me, I should have been very, very averse to risk cuz they were like, "Hey, you should go be a pharmacist. Super stable job. Go be a doctor, engineer." And I just flat out ignored them. So for me, my environment, maybe I really enjoyed pissing my parents off, so I did the exact opposite, and that's where my environment made me more risk-tolerant than otherwise. But the less averse you are to risk, the more likely you are to be an entrepreneur. Because I've said this in other podcasts, but you kind of have to be delusional to decide to go be an entrepreneur because the chances of success are so low, right? And you're really betting on yourself that you're going to be like the 0.1% that's going to make it. I don't know if I was destined to be; I really do think it was just from a very early age I was very rebellious.
Yeah. I'm just curious because I've heard you share on podcasts that when you decided to drop out of college, your parents cut you off on everything, and then you blocked them so they were emailing you or something like that.
Yeah. So I did block them, and then they started spamming my emails, which I didn't block them on my email, but all the emails are formatted the same, so Gmail just picked it up as spam and put them in a spam inbox.
Because they were—I think you said broken English.
Yeah, it was super broken English and they were just really upset cuz they're like, "You have no risk calculus at all. Like, how could you be so stupid to drop out? You only had one semester left. You should have gotten your degree. I didn't know anyone that thinks the way you do. No one else would make this decision." And I'm like, "Actually, technically 20 people did make this decision." But yeah.
And so, my quick question was: by how much amount of money did you have to make for them to finally stop questioning you?
Okay, so they actually were really happy when we raised our Series A. That was a $4.5 million Series A, because Series A's were very tiny back then, and then they're like, "Okay, cool. This makes more sense now," because it started feeling more real for them.
And I want to go back a second to what you're talking about, how if you want to be a good entrepreneur, you've got to be willing to take risks, you need to be delusional. Is that something you think someone can learn? Let's say at 30 you're like, "You know what, I want to be more entrepreneurial." What advice would you give that person?
I mean, I do think that you are constantly adapting to the environment that you are around. So I do think that the best way to get to that mindset is probably just move to San Francisco, because when every single person around you is absolutely delusional and believes they can build a unicorn, and you get a lot of data points of people that have actually done it, you start believing that the impossible is possible, right? And there's no better place on this planet Earth, outside of San Francisco, where quite literally everyone is trying to be an entrepreneur. So that's really the best way to shift your environment quickly.
So speaking of being delusional, did you ever genuinely think at such a young age, "I could be a billionaire one day"?
I don't think I necessarily thought like, "I'm going to be a billionaire," but I thought, "I have the possibility to build a large company," because especially in the Thiel Fellowship, I was seeing other founders raise millions of dollars, hundreds of millions of dollars, etc., reaching unicorn valuations. I've met founders of unicorn companies and it just seemed so normalized, like the idea of not being able to do that didn't even cross my mind. It was just a question of time, right? Like, is it going to take two years? Is it going to take 20 years? But I really do believe in the power of perseverance and keeping your burn low. Because if you persevere and then you're able to keep your burn low, which as an engineer and with all these AI coding tools, you can definitely keep your burn low, it's like eventually you will succeed.
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Okay, so then let's talk about your first company, Scale. Can you tell us how that started?
There's a lot of stories how that started, but really we wanted to just apply to YC, right? So we had built ClassPass for clubbing app, and that was just such a dumb idea. Immediately pivoted and we're like, "Let's just go do something more meaningful." And then we built this healthcare app called Ava, and this is actually what we applied to YC with. The idea was that we would help you find the best doctor for certain procedures that you need to get done. Terrible idea, because most people that need procedures are older and it's not something that you're constantly checking on your phone, aka why it being an app is bad. It's not recurring, right? And then old people don't use apps. So yeah, that was just like, "Okay, this is a dumb idea." But while we were working on this app, we were calling doctors a bunch. We're like, "Man, it'd be really nice if someone could call doctors for us every time this button is hit." And actually our YC roommates—I'm going to give a shout out, Kingston and Pache—they were like, "Oh, you mean like an API for humans?" And like, I know what a viral app sounds like. So at this point—
People listening, they don't know what an API is. Can you explain?
So specifically how an API works, I guess the simplest way to explain it with Scale is that using a line of code, people would ping us and ask humans to do a task, and then we would send a call back with that task complete.
And I was actually an early customer of Lucy's company. That's how we first met. I was working on a startup, and it was an AI startup, and we needed people to label our training data, so we worked with Scale.
What data of hers did you label? Do you remember what it was?
Well, it's going to be a little bit long-winded, but we were working with celebrities and their fans, and fans would send a lot of messages, and then we'd have humans group them into what they're saying, like, "I'm your biggest fan. I'm such a huge fan." So then we'd be like, "This is what it means." So then people would be like, "This is what it means: yes. This is what it means: no."
Yeah. So we did a bunch of different tasks in the very beginning because it was so broad as an API for humans. So we'd do sentiment analysis, but we also had people use our API endpoint for phone calling and people were trying to scam people in buying stocks. So they would literally have one of our humans be like, "Hey, you should invest in this stock because of XYZ," which is kind of insane. We actually thought we were going to take over the BPO industry. So we thought we were going to take over phone calls, it's like outsourced industry in the Philippines. So we thought we were going to take over phone calls, but then that quality control became really difficult. And then we kind of accidentally landed on the self-driving car market slash the AI market after we had raised our Series A. We had blasted pretty much every single YC founder being like, "Hey, we have this API for humans. Are there any human tasks that we can take over?" And then we realized that self-driving car companies had a lot of money, so Cruise became one of our first customers.
Cruise also became a billion-dollar company. YC is an incubator for startups, so you have huge batches, and it used to be a really successful thing to do where you'd go into YC and sell to other YC companies, which you guys are a poster child for doing that, and Brex obviously.
Yeah. And our investors were just like, "You know, you could use AI because you have structured data eventually. So eventually the human cost can reduce and you use more and more AI as you gather more data." And we're like, "Oh, that's smart." So then we switched it from Scale API to Scale AI. So that's the foundational story of Scale AI.
So, did team matter more than idea?
I think that we were really right place, right time. We managed to really dive deep into the self-driving car market, which just had a lot of money to spend, because there was a competitor, CrowdFlower, that existed. And we knew that CrowdFlower existed, but we saw they weren't API-forward. So in our head, we were like, "Well, let's just take CrowdFlower's endpoints and then do better marketing and market towards engineers." And that honestly did work. I think team really mattered here, though, because we were able to move fast and build tools much quicker. There's this one engineer that basically built our LiDAR tool out in three days. And then when we presented this LiDAR labeling tool to all these automobile companies, they're like, "Oh my god, can we just buy this tool?" And we were like, "No, you have to buy the data from us as well." And that was really how we kickstarted making a lot of money through high-value contracts.
And you ended up leaving Scale after two years. What happened?
I would say like there were a lot of just arguments with my co-founder on project roadmap, tech debt, etc. I was working with a lot of the outsourced labelers, so I was very focused on, "Hey, I want to make sure they're getting paid on time. Let's build better tools for them," etc., versus we were getting a lot of these larger contracts and we were shifting a lot of our priorities based off of what contracts we were getting, like, "Okay, cool. This person needs this custom data labeling tool made for them, so let's shift all our engineering resources to that." And that wasn't great. And then ultimately it just came down to I made a few complaints to the board and word got out. So yeah.
You want to elaborate on that or should we move on?
I mean, it's never really good to talk down on your co-founder to your board members because at the end of the day, most investors and most board members are always going to listen to the CEO, right? So it's better to, whatever you can, work it out with them, because if you go behind someone's back, it will get back to them.
Yeah. Looking back now, would you have done anything differently?
I would have probably tried to communicate a little bit more, but I also think I would have just left earlier. Yeah, cuz at the end of the day, the CEO does make the decision at the end of the day. And if you are not in alignment with your CEO for whatever reason, it just doesn't really make sense to be there.
And when you left, did you know that Scale is going to be such a huge company? For those of you watching, Scale ended up being valued at $30 billion and had 50% acquisition by Meta just last year.
This is interesting because, like, yes and no. Scale is one of those companies where we were getting a lot of contracts very quickly, but we were also at risk of losing these contracts at any point in time, right? And there were competitors out there that were doing better quality data and also profitable. So it was really up in the air: how long can these government contracts sustain us? How long can the marketing go? And I think that we were very lucky, again, right place, right time when Meta bought us out.
Yeah. And funny enough, my co-founder from the startup that failed ended up working at Scale, so I—
He had a great exit. He crushed it. So he did really well. But I remember when our startup failed, one of the pieces of advice that our investors had given was, "Find a startup that's Series A that has product-market fit, that's a rocket ship, and join them." And it was Scale.
So people were really bullish even back then.
I mean, just the talent density once you start getting a few smart people.
Yeah. I was curious, I think you touched on it a bit, but why Scale succeeded when you were saying so much of it was luck and there were so many reasons you guys weren't going to succeed?
I think it succeeded because we had a bunch of smart people working on it. At the end of the day, we were right place, right time. There's an AI boom happening. Your models are only as good as the data you provide it, right? So if you provide your model a bunch of data where it thinks a pedestrian is a car, it's going to think a pedestrian is a car. It needs millions of images to determine like, "Okay, with 99.9% accuracy, this is a pedestrian, not a car." So because of this, and every single AI company is building models, we were the go-to in Silicon Valley for high-quality data. Obviously this started shifting as more competitors came out. But for example, government contracts last a few years and they're very defensible. So because of these government contracts, it wasn't like a new company could come in and swoop our government contracts away.
Interesting. So if you're starting a company today, what can you do to increase your chances of being right place, right time?
I honestly think if you're starting a company, if you look at any sector that has repeatable operations that hasn't been affected by AI yet, which pretty much every sector is a free-to-grab right now.
Another example of a company I actually just invested in—and it's something that I actually don't know much about, but I kind of learned throughout the investment—I guess both HOAs and travel companies have a lot of very boring, repeatable operations that don't take any brain work, right? And they're now using AI to essentially increase the efficiency of these companies by 80%. I think an example of repeatable operations is lead generation, where it's like, "Okay, cool. Let us go find the CTO of a company, and then let's figure out their email. Let's test out which email is valid:
[email protected],
[email protected],
[email protected], figure out which one goes through, and then you have the lead, right?" That is very easily AI-able.
Okay, so you decided to leave Scale.
What happens next? Right after, I was really enthusiastic. I was like, "I'm going to go build another company, right?" So literally the same day, my friend quit Stripe and we're like, "Okay, cool. Let's go build a company." Turns out I was super burnt out. Not the right move. So I went and traveled a little bit, and then afterwards I decided to start a venture fund. So I started Backend Capital, where we invested in a bunch of early-stage companies. And then from Backend spun out HF0, which is this program where we wanted to invest in the best engineers and in second-time founders. So it was a YC competitor, but much smaller, where we would live with the founders in-house and take equity from founders and give them a small investment to give them free housing, free food, pretty much take away all their daily needs so all they need to focus on is building. That model is actually working out really well. It's in San Francisco now and, yeah, I'm really happy about it.
Do you think incubators are still worth it for founders, and if so, which is the best incubator right now?
I think the best incubator really depends on what kind of company you're building. So if you're building anything B2B, I still would say Y Combinator is the best incubator because you just have thousands of customers to sell to, right? And there's this mantra with YC founders where it's like, "Oh, you're a founder, I trust you. I'm going to give you my time because we received time from other YC founders back when we were building." So it's giving back to the community. If you're a second-time founder, I'd actually really encourage HF0 because you're getting a sizable investment. You're going to be a thousand times more productive when all you need to work on is building. And you're a product of the environment that you're in, and you're going to be around all these brilliant founders that have started companies beforehand, and you're going to be with them 24/7, right? So it all really depends.
And when you're investing, what are the most important traits you look for in a founder?
So this is actually a really difficult question for me to answer nowadays, because before it was like: how good of an engineer are you? Because I think how long your runway can extend is directly correlated to that, because if you're a phenomenal engineer, then you can literally couch surf, and I figured out how to get free food through these VC-funded startups. You can drink Soylent. I don't care how you do it, but you can live very cheaply and pivot for a decade—which one company that I did invest in pivoted for a decade.
The cockroach strategy that Paul Graham always talks about: just how long can you survive for?
Exactly. Yeah, I have a great exit and I have a lot of equity in Anthropic now because an angel check I put into a company, the founder didn't give up, just literally pivoted for a decade and now the company's acquired by Anthropic. Yay. That used to be what I looked for. And also it's just talent density. If you're really smart, other smart people want to work for you. A players hire A players, but B players are going to hire C players, and you don't want your founder to be a B player. Nowadays, because of AI, I actually think ideas and marketing people I do look at now, because now you can use Lovable, Replit, whatever, and get an MVP out, and that MVP can get paying customers. And if you know how to market it well, you can always hire a great CTO in after.
Have you invested in any companies like this?
I've not yet invested in companies like this, but I'm starting to look at them.
I know that the marketing person was always like the B-tier, lowly looked upon in Silicon Valley—me myself having been one of them. But now it's our turn to shine.
It really is, though, because right now Cursor, for example, is better than your typical staff engineer, which is a really big deal. And the better engineer you are, the more you're going to be able to use Cursor to be like a 1000x engineer. If you're a new grad, you might actually not be able to use it to your full power because, for example, if it makes a mistake, that compounds, and then more bugs start happening. But a staff engineer is going to be able to prompt it well, catch these mistakes, and be that 1000x engineer. So if you're a marketing person and you can get to MVP and actually get customers and start making money, you're going to be able to fundraise better than anyone else, really. And then if you fundraise well and you're generous enough with your equity, you'll be able to hire a really smart CTO.
Are there any startups you're looking to fund right now?
Honestly, I would say startups looking for funds, I'm probably self-funding at the moment. One example is I'm working on this agent growth tool. Can't really talk too much about it, that I really need to hire a CEO in for. So if you're watching this and you're interested, I am self-funding an agentic growth company. And I've just done a lot of growth at different companies I've been at, and I just can't go into too much detail, but it's the perfect thing for an agent to go in and be like, "Okay, cool. We're going to 10x growth this way."
So it's in agentic tools, basically.
Agentic tools. AI does it for you.
I think it's like ChatGPT, but they actually have power to go do things.
Yeah, got it. Or Claude Co-work if you give them access to your—
What about your idea related to vertical dramas and—
Oh, yeah. I think there's just a lot of money made in the space because with vertical dramas, like the ones you see on TikTok with DramaBox, etc., it's all a very typical script and they split it up on cliffhangers, right? And because you're watching it on your phone, the quality doesn't need to be as high. In fact, I would say the acting is subpar on purpose. Sorry if you're—
No, I've seen them. I've heard you guys talking about the short—
And the quality is because it's on your phone, people aren't going to notice or they're not going to judge as much if the belt changes to a different color in another scene, right? I just don't think those things are notated.
On TikTok, a lot of them are AI generated. There's also people casting for them, but they're like really cheesy dramas with a bully or with romance. So it's the kind of stuff that hooks you. The writing is pretty cringe and so is the—
Yeah. It's like CEO falls for a poor girl or like—
I remember I saw one of these once. I thought it was so weird.
But Lucy's idea for this is actually really good. Her idea was an AI tool that would help you script these from start to finish.
Yeah, basically, and you generate the scenes, etc. Obviously people are now using AI to do that, but I think that there can be better for sure. And whoever creates the best one can either own the full stack and just launch their own version of Netflix for this, or they could sell to all these different vendors like DramaBox, ReelShort, whatever.
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I want to take a second to pause here because I've always been really interested in entrepreneurship and investing cuz I went to Stanford, I was in Silicon Valley, I worked on startups. Andrea, you sort of became an entrepreneur in a very different way where you did content. Do you feel like an entrepreneur?
What's your definition of an entrepreneur?
Somebody who works for themselves, who has to pave their own path. I think an entrepreneur can be a content creator, it could be somebody who started their own $5,000 business, or it could be somebody who's working on an actual startup with funding. I think there's a huge range.
Well, I feel like by default, if you're a creator, you're an entrepreneur because you're working for yourself, but it doesn't—I don't want to say it doesn't feel like something I've earned, but I would say I often pride myself in what I think my strengths are in my job, which I would say is creativity, content, scripting, ideas when we're trying new things, like specifically going into music. So I would see—I don't want to say more of an artist cuz I just hate the word of creator, but I would say—
I like artist in the creator world rather than like I'm driven by the entrepreneurial mindset. But one question I wanted to ask Lucy, actually, since she has so many thoughts on where the future is going: if you were Alex and I for the next three years, what would you do differently, or would you do anything differently at all?
I would say if I'm a creator—I've told Alex this already; I'm trying to get Alex to start a venture fund—go start a venture fund, because as creators, you guys get access to deals, right? Cuz people are like, "Okay, cool. We know your name. We want to—"
Exactly. You have angel investing.
But I think that you can get the extra access. And not only that, but you probably have the ability, if you're investing in consumer apps—and I would only do this with a few select companies you believe in, because if you dilute your name by supporting a hundred different companies, no one's going to take your word seriously. But for the companies you really believe in, you can also get advisor equity on top of your investment, double your investment, let's call it, and actually help change the trajectory of those companies, which is awesome. Now, building a company is cheaper than ever, right? And because of that, I think there's going to be more and more unicorns that come out of this next decade. And that means more opportunity for just generational wealth growth. So I'd probably focus on that. And then the second would just be start a company. But the way I'd start a company as a creator is I'd probably just hire in a CEO or just be like a Chief Creative Officer, take your 10 to 50%—let's be realistic, 10 to 50%—and have someone else do all the operational stuff so you can focus on doubling down as a creator.
That's good advice. And I want to talk a little bit about making startups in the AI age, because if you're scrolling X, you're always hearing about people who vibe-coded a company and everybody's really hot on AI right now. Do you feel like AI is a bubble or do you think it's a real opportunity where any entrepreneurial person should be hopping on it?
I think it's definitely a real opportunity. It's not a bubble in a sense that, obviously, starting a $5,000-a-month business is very different than starting a billion-dollar company, but it really has lowered the barrier of entry. We've talked about how now marketing people can bring their ideas to life, but because every single employee can be a 10x employee now, and yes, some jobs are going to be obsolete, you can get to revenue numbers much cheaper than what it would have taken before. And just the operational efficiency that AI is helping out with makes it so that it has truly lowered the barrier for everyone. For example, funding for women was more difficult in the past, but now they don't have to fundraise as much money to reach revenue numbers to prove themselves. So I'm excited for the future.
And how do you pick the right thing to work on?
I always say you should solve problems that you actually have yourself, because if you have it, chances are there's millions of other people that also have the problem. So the question of whether it's a lifestyle business or a venture-backed company is just what you want to do with it, but how much are people willing to pay for it, is it recurring or is it a one-time payment, etc. And you can work backwards from there and be like, "Okay, cool. This business can make me $10 million a month, awesome," or, "This business is going to be the next decacorn." But yeah, I think that if you solve a problem for yourself, you can't really go wrong.
Are there any problems you haven't yet solved for yourself?
I feel like there are a lot of problems that I haven't solved for myself, but I am super hyper-focused on this growth thing right now.
The growth agent, yeah. Got it. Yeah, because it's a problem that I've had at every single company I worked at and I'm like, "Okay, there is a solution. I just don't have full-time capacity to work on it." So hiring a CEO, I have to give them all the information to execute.
Speaking of, you also started Passes, which I'm an investor in and Andrea uses. It's basically like a Patreon competitor. It's where your top fans get more exclusive content. Can you tell us why you decided to start that?
Over COVID, I became friends with a lot of creators and I noticed a few different trends: one, where creators were essentially entrepreneurs—they were able to monetize their brand and build their businesses, so going back, I also think creators are entrepreneurs—but brand deals became way more fickle over COVID. And I also noticed they weren't actually getting paid on time. I had friends that made six figures a year off of brand deals, but they had to go work at McDonald's because they didn't get their check on time and they were really bad at money management. I noticed that problem. I noticed that creators are really bad at money management in general. They didn't understand taxes; every single paycheck they got, they immediately went shopping. And I was like, "This is also a problem." And I saw another problem where I didn't think that managers were very aligned with creators, and creators should be asking for more equity in deals that they were getting from these brands. So I was like, "Okay, cool. What kind of platform do I want to build to tackle these three problems?" And I really quickly realized that unless you're the moneymaker for creators, they're not going to listen to you on everything else. If I told a creator that I was not the manager of, "Hey, you should ask for 1% of this company," they're going to look at me and be like, "Why would I do that instead of get cash, right?" They're going to trust their manager that has brought them deals forever. So I was like, "Okay, step one to being able to execute a vision on really helping creators be an entrepreneur and build their business is make them a lot of money." So I saw fan monetization as the quickest way to do that over COVID. Also, I generally think that when you build companies, it's always a good sign when there's a company that has been stagnant with innovation but valued at a high dollar amount. So I was like, "Okay, cool. They haven't really innovated in a decade." And I will say they have been innovating a lot since we came out, so props to them for deciding, "Okay, now we have to innovate."
space. It's just like no competitors came out for like a decade.
Shout out to them also. Like they helped so many creators monetize their dreams.
Also Sam Yang is awesome.
Yes, I love Sam. I know he's—
So I was like, "Okay, cool. This seems like a great company to like actually like the TAM seems high enough, and there's an opportunity to innovate." And I think it's great that we came out, right? Because now we're forcing each other to innovate. Like Patreon has come out with a ton more features since we've come out, and we're forced to be on our feet and compete with them. And we made our podcast studio because we saw how much they were doing for podcasters. So like, net-net, this is amazing for creators that we're at each other's throats.
Is Passes the reason you moved to LA?
It is a reason I moved to LA, yes.
I often hear you recite the quote, "You are the sum of the five closest people around you," and you were also talking earlier about how San Francisco is the best place to be. Do you think being in LA has made you less ambitious at all?
I don't think being in LA has made me less ambitious. That being said, I have thought about this very deeply, like, "Should we have opened up an office in San Francisco instead?" LA is amazing for creators, right? Because we are such a relationships-driven business. Like it's emotional sales and emotional retention. Being in LA is great because there's so many creators around. That being said, I think the talent density in San Francisco is like absolutely amazing. And I'm like, "Man, it'd be really nice to use some emotional sales and emotional retention on like all the engineers in San Francisco."
So, if somebody is starting a company right now, would you say move to SF?
I think it really depends on what you're building, right? Like if you're building in fintech, go move to New York. You want to be around all the banks and finance people. If you're building in the creator economy, LA—I would actually even argue Miami is very doable. There are a lot of creators in Miami. LA probably has the most clouted creators, but even for Passes, a lot of our top creators live in Miami or some other city like the middle of nowhere, like in Alabama. And if you're building something in the AI space or something highly technical B2B SaaS, go to San Francisco.
And what have you learned about the creator economy since building Passes?
I think it's been really interesting just the type of people that could make money on Passes. I think, for example, if you're too big, like too famous, you're constantly flying around, traveling, etc., you're going to make a lot less money. But it's not because your fans don't like you; I think it's just you're not spending as much on actually creating content. I think that people find it less believable that you are actually interacting with your fans versus it being your manager or someone. So they end up spending a lot less money, even though you could sell out a stadium, let's say, versus our creators with between 100,000 to let's call it a million followers—they make a lot of money. And I think a lot of it is, you know, like with early music artists, you're like, "I want to support them. I'm going to buy their merchandise and brag that I was an early supporter." I think the same thing exists in the creator economy. So it's really surprising just how crazy fandom can be for these more niche creators.
And what shifts do you think are going to happen over the next 10 years in how creators operate online and fandom in general?
I would say I think that creators are going to continue to really create their own content and engage with their fandom because their fandom is everything, but they're going to spend a lot less time working on actual brand deals, commercials, etc. I know every creator is super anti-AI right now, but I really do believe that the first creator that makes, let's call it like a billion dollars licensing out their likeness is going to start the trend. Kind of similar to how after Kylie did her lipstick and Logan Paul did Prime, everyone wants to start a company, right? Because once people realize that they get to save time, they don't have to fly out for a shoot or spend a week creating content for an ad, and they can just focus on nurturing their community and creating more content that is relatable, which further nurtures their community. They're not going to want to spend time doing something they're not passionate about. It is the best way to scale your time, just telling L'Oréal, "Just use my likeness. Make the ad for me."
But would an audience perception need to shift? Because people would hate watching AI-generated content of someone, at least right now.
I think specifically it's not going to be like the content they put out to their audience. YouTubers are always going to be filming their YouTube, right? And I would like to think that fans and audience perception, they're not really going to care about like a L'Oréal ad that they see on TV. And I think it's just important that the creator doesn't dilute their brand, right? But I really think it's a win-win for everyone because also that time that was spent creating this ad, they could be live streaming with their fans and maybe even showing their fans, "This is the AI creation process." But if fans get more time with their favorite creators, I find it hard to believe that they would be resentful that creators are selling their time to a company.
Would you ever license your likeness?
I would find it really hard to give over that trust. I think there's certain situations I'd be okay with. Like if I filmed a YouTube video and I wanted to rephrase how I did something or add something in, and be able to just type into something and it changes what I filmed, that would be super helpful. But giving control entirely would be scary. What about you?
Yeah, we've had this conversation a lot before. Obviously, I feel like right now it's easy to say no, but in the next coming years, like you're saying, I think a lot will change and then maybe we'd reconsider. But I hope I never have to. Okay, so let's get into some of the fun stuff. You've obviously made it. You're a billionaire. You're working on a company, and on top of that, you're always doing cool stuff. You're going to concerts. You're waking up and exercising every single day. You're always traveling. I don't really understand how you do the work-life balance.
I sleep six to seven hours every night.
Yeah, I would say my Eight Sleep is doing a lot better. So my Eight Sleep has me averaging at like five hours a night now. But you've always needed less sleep. And one of the most tilting things about Lucy is she used to be able to work as she sleeps. And I mean that literally. In her dreams, she would be self-aware and she could work as she was resting.
Oh, was it like you were lucid dreaming?
Oh yeah. I totally trained myself to lucid dream. I was obsessed with lucid dreaming.
Honestly, I have not lucid dreamt in a while. I guess I had like one lucid dream last week, but it's been a lot less often, which is really disappointing.
What do you think? Because you've been taking the wheel to do it less, or—
I actually don't know. Maybe it is that or maybe I'm just getting better sleep. I really cannot tell you. But when I was younger, I would buy these lucid dreaming devices and you would just put it over your head, and it would measure when you're in REM sleep and it would do an audio or light output to wake you up and be like, "You're dreaming," so you recognize that in your dream.
Is anyone working on these? I want to try this.
You can find them on the internet, yeah.
I've never heard of these.
Yeah, so that was how I was training myself to lucid dream too.
Yeah. I think Lucy's built different. Your ability to work out on little sleep.
I mean, have you ever had dreams where you feel like you were working?
Not where I'm working. I definitely lucid dream. Sometimes I'll wake up in my dreams and be like, "Oh, be careful. Be careful. I don't want to wake up." And then I can somewhat control what I'm doing. But I don't work in my dreams.
I can't have that much fun.
I've gotten a lot of ideas from dreams, but I guess you only remember them in the second you wake up, and they're more like melodies, or sometimes in my dream I'm actually working on music and thinking about music. But I guess music is very different probably from the work you guys are doing in your dream. So Lucy, now that you have unlimited money—
I wouldn't call it unlimited money.
Do you have any career goals left? Does anything like that still excite you?
I mean, obviously I'm incubating a bunch of things, right? I would say the most exciting thing or the most fun thing I'm incubating right now is actually a D2C product, because I've always done tech, right?
D2C is direct-to-consumer.
Yeah. So I've always done tech and I'm like, "Let's do something fun." So I'm building a travel apparel company. I'm so excited for it because we just got our first samples. Obviously, we're mixing and mashing them up right now, but we're going to send them back for second and third samples. Hopefully, we'll be able to launch in November. But that's really fun because you get to actually touch it, wear it. The marketing is going to be different. Like I was just like, "I'm just going to gift it to every DJ I know, and then I'm going to throw it at all my most famous friends and just snap a photo of them in it,"
"and then post it on my Instagram stories."
So you enjoy building companies for the process of it.
Yeah. I mean, I think it's just fun. You're solving problems that you have, right? And that's always a fun thing to do. In terms of life ambitions, I definitely do want to get into charitable work. So I've been working with some nonprofits just on ideas and how we can use AI to solve everything from education to human trafficking. That's been fun too. I've always wanted to start my own foundation/nonprofit, but I also understand that it may be better to continue focusing on what I'm good at and let the experts do their thing. So that's something that I'm just exploring, and I'm still in my early 30s, so we'll see.
And on the startup side, do you feel like you have anything left to prove to yourself?
I would love more wins, right? I think more wins is always great because having one win is like, "Oh, okay, cool. That could have been just luck." I actually don't believe it's just luck, but a lot of people are going to say that.
Why don't you believe it was just luck?
I think success is a mix of hard work and luck, and that luck is created. Like you can put yourself in very lucky situations. For example, if you work out of the right cafe in San Francisco every single day—
You're Twitch streaming as chess becomes popular and there's a pandemic.
Yeah, exactly. I do think luck is created and it is definitely a function of hard work and what environment you put yourself in.
Were there any things that failed in the last—or like small failures in the last few years? I mean, I guess failed is the wrong word, but I didn't really want to use that word. Like anything that didn't go your way, because obviously you're a person with so many accomplishments. People listening to this probably just hear only the good. I'm curious, like for example, every time you angel invest in a company, right, you're probably going to have like a 90% failure rate.
And I've definitely had those where I was like, "Oh, that company didn't go as expected. Oh well, I maybe shouldn't have written such a large check in it." I think that, you know, I've hired the wrong people for the company, and maybe I didn't fire them fast enough and that caused disasters in the company and fires I had to put out. I've trusted the wrong people and they have caused me millions of dollars in issues. But I do think that everything that goes wrong is a learning lesson. I generally view everything as a learning lesson where it's like, "Okay, the universe gave me this shitty thing, but it is so something worse doesn't happen in the future, and I'm going to take it and learn from it."
And you're always so optimistic about the future. How do you stay like that?
I think I'm generally just a happy person. Like I really do think I'm like top 5, 10 happiest people in the world, which really helps. Maybe it's because I really—
Have you always been like this?
No, I haven't. I think it was when I moved to Miami. I was insecure before.
What were you insecure about?
I don't know. I just didn't think I was cool. I was like, "Oh, I'm not cool. I don't really have friends." I was a little nerd. I was dorky. I moved to Miami and I felt unconditional love for the first time. And I think it's like Latin culture, but everyone was just like, "Mi casa, su casa." They'd be like, "Oh my god, I love your energy. Who are you here with? You don't have friends? You're going to be our new best friend now." And no one knew who I was. I wasn't anyone back then. And all these people just showed me such pure love out of nowhere that I suddenly became—they made me more confident in myself. And now, I think that obviously builds because when you do become confident and you're happy, then suddenly your aura changes. I do think my aura has shifted a lot since moving to Miami. And now, a random person on the street will be like, "Wow, you seem dope."
And now you have such a good group of friends around you as well.
And I think I was so, so lucky because I see other wealthy people, they're always trying to hang out with celebrities, models, etc., who will drop them at any moment. And I have such normal, cool friends. Like I have low-key friends who are way wealthier than me, no one would ever know, and we're literally just here for each other.
I've actually noticed that a lot in different circles. The really famous people, they want to be more rich, and they'll try to hang out with people like that. The super wealthy people, they want to be more cool and have more clout, so they like to hang out with celebrities. People are always seeking what they don't have. On top of that, I know really rich people who literally have people on retainer at like $2 million a year to bring famous people around them. I've hit that point where now I know kids of multi-billion dollar families, etc. Because what I've learned is all rich people on this planet know each other. It's a really, really small world when it comes to billionaires.
Do they all sit around a table and—what does the public get right about billionaires and what do they get wrong?
I think what they get wrong, everyone thinks billionaires are these evil people that are like, "Haha," that you had to be evil to be a billionaire. Or I always find it funny when people are like, "Oh yeah, they're all part of the Illuminati." And I'm like, think about this: if the Illuminati were real—and I'm not saying it's not real because I wouldn't know actually, and the reason why I don't believe at least billionaires are the Illuminati, I would argue if it did exist it'd be more famous people—is because billionaires don't really have that much influence. If they did, their kids would be the pop stars that they've been working towards their career on. I have very talented friends whose parents are billionaires, but they're not willing to give their kids unlimited money, and their career is going nowhere, right? If the Illuminati did exist and billionaires were part of the Illuminati, they would be controlling the world. There is a reason why their kids are not pop stars. So I have thought about this. Versus when you think about the concepts of Illuminati, it is influence, right? And famous people have a lot more influence than rich people. I think when rich people want influence, they have to pay famous people for that influence, which is why you'll see people donate to politicians, you'll see people pay to have celebrities attend their birthday parties, etc., because that's how they buy influence. What they get right about billionaires is that I do think that you can buy anything that your heart desires. Do most people do it? No. But I think one example is, let's say you had a dream celebrity crush. You could very easily go find that person's best friend, pay them let's call it a million dollars to set you up with their best friend, and it's up to you to close. But could you go on a date with your celebrity crush? Absolutely you can. Money can buy you nearly anything you want in this world. It's just how much are you willing to pay?
Do you think billionaires are happier on average than most people?
This is really tough for me to answer, actually. I think that if you fall into, "Okay, cool. I'm going to pay to hang out with celebrities. I'm going to flash my money to go get hot girls," which is what a lot of billionaires do initially—they try to find happiness through materialistic things versus experiences—no, you're not going to be happy. Obviously, that's not going to give you fulfillment in your life. But I do think that billionaires that are using it to live out experiences—and that experience could be, "I love clubbing, so let me go to Ibiza and club and listen to great music." If that makes you happy, that's going to make you happy. Or it's going to be, "Okay, I really care about this cause, so I'm going to donate a bunch of money to this and attend all these charity galas." If that makes you happy, amazing. But I do think if you are spending money on experiences, yes, you will be happy, and you're not going to have to worry about things like how am I going to afford my next meal, things that normal people do have to worry about. Your life is a lot less stressful. I think people go through phases. So many people will go through a phase where they do really try to get fame or get the hottest girl possible. And especially men, new money men, they do that for let's call it 3 to 5 years before they snap out of that phase, but by then they might have lost their wife.
Did you go through that phase at all?
I actually didn't. And I think that the reason I didn't was because I went through a phase with paper money, right? Where I had a lot of money on paper, but I didn't actually have cash, and I was burned several times through that, where I had people try to use me and then they're like, "Haha, I can't use you. You have nothing." And throughout that time, I've really learned to value my closest friends I've known for the last decade, like you. So no, I never really—and I just don't think like a man. I've never thought like, "I want a hot girl." That's just not me.
And what is it like dating when you're a billionaire?
I think that you've got to be careful. I'm very careful in the sense that I really do try to figure out what this person's intentions are: what their job is, what their family values are, what they want to do in the future, where they come from. I really ask every question. I think a difference is that people are willing to lie. People are willing to lie about their education. They're willing to lie about their net worth. They could be dirt broke but pretend like they're a trust fund baby because they want you to believe that they're not there to use you for your money when they are. So it's really being able to suss out the liars, which I think because I'm so trusting, I have a harder time doing until we might be months in and then I'm like, "Oh wow, so you're broke and you're a liar."
Is there an ideal age that you'd want to start a family and have kids?
It's funny because I used to always say in my early 20s, "I want a family and kids when I'm 30." And now that I'm 31, I'm going to push it back another five years. So let's call it like 35, 36. Yeah, because I'm just not ready yet. I'm having fun.
Yeah, I can't imagine. What are you going to do when you've got to go to the rave?
I mean, that's what nannies are for.
Or you bring the kid, put them on your shoulders—
